KARACHI: Pakistan has lost around $4 billion in portfolio investments over the past decade, data gathered by a market research firm shows, with analysts attributing it to persistent political and macroeconomic uncertainties that deterred foreign investors from an otherwise promising equity market.
The South Asian nation’s net foreign portfolio outflows exceeded the inflows by as much as 2,569 percent since 2014.
Foreign investors are estimated to have sold $3.5 billion of their net portfolios, compared with $130 million net inflows the country could attract in the past decade, according to data compiled by Karachi-based Topline Securities market research firm.
Other reasons that kept the foreigners jittery besides political and macroeconomic uncertainties included the departure of major funds like Vanguard from Pakistan’s market, the country’s downgrading by FTSE to a frontier market and profit-taking after the recent strong rally at Pakistan Stock Exchange (PSX), according to analysts.
“Politics and macroeconomic uncertainty both, plus global shift of capital away from emerging and frontier markets toward the US market predominantly,” Muhammad Saad Ali, head of research at Lucky Investments Limited, told Arab News, when asked what made foreigners sell their shareholdings.
